The state-run company has “changed its strategy
fundamentally” by declaring it aims to be a leader in chemicals
production, Fabri, a director with the advisory company, told
reporters at a briefing in Dubai yesterday. The oil producer,
known as Saudi Aramco, will increasingly compete in chemicals
markets with Saudi Basic Industries Corp., he said.

“Aramco is now the vehicle of the Kingdom” for expanding
in that industry, Fabri said. The oil producer may take the lead
role in advancing the country’s goal of building up a chemicals
industry and creating jobs through related services and
manufacturing, he said.

Saudi Arabia holds the world’s largest oil reserves and the
fifth-largest gas deposits, according to BP Plc’s Statistical
Review of World Energy. The country is seeking to produce more
gas to run power plants and save more valuable crude for export.
The government will allocate limited gas resources to whichever
industries create the most jobs, Prince Faisal bin Turki, who
advises the oil ministry on such matters, said at a
petrochemical conference in Dubai today.

Saudi Basic, known as Sabic, is the country’s majority
government-owned chemicals maker. It’s investing about $50
billion in developing new production capacity through 2019,
Fabri said.

‘Top-Tier Producer’

The kingdom will spend about $150 billion on petrochemical
projects through 2016 to boost productions, Prince Faisal said.
Saudi Aramco is shifting its focus from exploring oil fields to
developing natural gas deposits and refining and petrochemical
plants, Chief Executive Officer Khalid Al-Falih said last week.

The company will spend $90 billion expanding its refining
and petrochemical assets and aims to become a “top-tier”
producer of petrochemicals within the next decade, al-Falih said
during a speech in Doha, Qatar Dec. 6.

“It is a very good idea to add value to hydrocarbons
through petrochemicals rather than just using it as an energy
resource,” Alix Partners’ Fabri said in an interview with
Bloomberg Television yesterday.

Middle East chemicals producers may see some unused
production capacity through 2015 as they build plants at the
same time as demand in Asia slows, due to slackening demand for
consumer products in industrialized economies in Europe and
North America, Fabri said. Long-term demand will rise, making
the investments in new capacity profitable, he said.

Aramco, building a $20 billion joint venture plant with Dow
Chemical Co., is seeking “to participate in the fast-growing
Asian market” where demand for petrochemicals has been very
high, Fabri said.